Why Open Source Is Disappearing From Open Source Companies

In a TechCrunch post, Levine insists it’s almost certain we won’t “see another Red Hat” as “the odds are long and the path is littered with the corpses of companies that have tried the support model.”

Levine is right, of course. But then again, we already knew this.

Redmonk’s Stephen O’Grady argued back in 2006 that we wouldn’t see another billion-dollar open source company like Red Hat. Indeed, it has been a long, long time since anyone has mustered a serious attempt to emulate Red Hat like-for-like—the one exception being Hortonworks.

It turns out there are other open source-friendly ways to build “open source businesses,” making the Red Hat model just one of several different ways to build a business around open source. Which, perhaps, helps to explain why it’s virtually impossible to find any significant open source company that leads its marketing with open source as a differentiator. Yes, including Red Hat.

Value, Not Open Source

Red Hat led the charge to sell open source as a means, rather than an end. Back in 2008, I interviewed Red Hat CEO Jim Whitehurst and CTO Brian Stevens, and both were quick to position Red Hat Enterprise Linux subscriptions as value generators, not a matter of cost savings or even open source freedom.

This isn’t to say Red Hat downplays its open source message; it’s just more nuanced about doing so.

Back in May 2000, open source was a primary marketing message on the RedHat.com website. But today you won’t find open source mentioned on its home page. Instead you’ll find pointers to Big Data, an anti-patent pledge and the usual links for partners, customer case studies, etc.

Red Hat is selling value, not open source. However, if you search for Red Hat on Google, the company largely advertises its open source credentials, as Twitter’s Chris Aniszczyk points out:

But for those who find their way to its website, Red Hat does what every other software company does—it attempts to sell the value of its products.

Where Are The Red Hat Protegés?

As for companies trying to be “The Red Hat Of…”, each of them has abandoned open source as the leading marketing message.

In 2010, SugarCRM’s main landing page prominently advertised itself as open source. Today? Not a single mention.

My alma mater, Alfresco? In February 2009, Alfresco declared itself “the open source alternative for Enterprise Content Management.” No mention of open source on the home page today.

The same goes for Acquia, the Drupal company (see 2009 vs. today), and most every other significant company that sells support or software around an open-source project.

“But those are fake open source companies!” you might say. Okay… how about JBoss? That company was open source and proud of it back in February 2006, just before it was acquired by like-minded Red Hat. And even after the acquisition in February 2008, Red Hat’s JBoss division continued to maintain the JBoss.com website with its open source branding. The website got a significant refresh in May 2012, but it still continued to feature open source. But what about today? Well today, JBoss’ home page doesn’t even mention it’s open source.

This is not meant to criticize Red Hat’s whitewashing of open source from its websites. It’s just not marketing open source as its primary differentiator as it once did.

Open Source Is A Means, Not An End

The biggest companies making serious money with open source don’t even bother to pretend to be “open source companies.” They’re companies like Twitter, Facebook and Google, which have offered significant contributions to open source without expecting to make a dime from selling open-source software directly. This isn’t too different from most of the companies mentioned above, either, which provide value—including proprietary software—around open source.

Levine’s primary thesis—”combining open source with a service or appliance model is producing staggering results across the software landscape”—is well-known. It’s not new, and it’s one big reason that open source companies don’t bother selling open source as their primary differentiation anymore, and haven’t for years.

Levine is right in a trivial sense—there will never be another Red Hat as a “company peddling open source support as its primary value”—and wrong in the much more profound sense: There will be other “open source companies” making as much as or dramatically more than Red Hat. Open source will be central to their value, but it won’t be what they sell.

The only surprising aspect of Levine’s article is that he still has entrepreneurs promising him they’ll be “The Next Red Hat.” Maybe he needs better deal flow.

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